Institutional Affiliation: University of Munich
|You Owe Me|
with : w18543
In many cultures and industries gifts are given in order to influence the recipient, often at the expense of a third party. Examples include business gifts of firms and lobbyists. In a series of experiments, we show that, even without incentive or informational effects, small gifts strongly influence the recipient's behavior in favor of the gift giver, in particular when a third party bears the cost. Subjects are well aware that the gift is given to influence their behavior but reciprocate nevertheless. Withholding the gift triggers a strong negative response. These findings are inconsistent with the most prominent models of social preferences. We propose an extension of existing theories to capture the observed behavior by endogenizing the "reference group" to whom social preferences are ...
Published: Ulrike Malmendier & Klaus M. Schmidt, 2017. "You Owe Me," American Economic Review, vol 107(2), pages 493-526. citation courtesy of